September 22, 2016

Director Richard Cordray
Consumer Financial Protection Bureau
1700 G Street NW
Washington, DC 20552

Docket No. CFPB-2016-0025

Comments on the Consumer Finance Protection Bureau proposed rule: Payday, Vehicle Title, and Certain High-Cost Installment Loans

Dear Director Cordray,

Members of the Experts of Color Network appreciate the opportunity to submit comments on the CFPB’s proposed rule on Payday, Vehicle Title, and Certain High-Cost Installment Loans.

We the undersigned, representing the Experts of Color Network—a group of more than 200 scholars, advocates, and community-based practitioners focused on building a fair and inclusive society—support the proposed rule on Payday, Vehicle Title, and Certain High-Cost Installment Loans under the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Experts of Color Network also supports the ability-to-repay requirement and restrictions to account access that are vital to protecting consumers from continuous abuse in the small-dollar loan industry.

Developing equitable and sustainable solutions that narrow the racial wealth gap are especially important as the racial demography of our nation shifts to include a growing population of color. For example, 14 percent of all payday borrowers are Hispanic[1] and an astonishing 73 percent of American Indians note issues with predatory lending in their communities where in some cases there are just as many short-term lending options as traditional banks.[2] African American neighborhoods are twice as likely as white neighborhoods to experience court judgments as a result of short-term loans, and these suits against low-income and low-wealth families largely result in wage garnishment where families are left with no assets to pay for their basic needs.[3]

Wealth stripping of communities of color through wage garnishment adds financial barriers to African American families, Latino families, and American Indian families who already make only 59 cents, 71 cents, and 62 cents respectively to every dollar earned by white Americans.[4], [5] In addition, this practice limits the long term wealth of African Americans, Latinos, and Asian American families who accumulate only 7 cents, 12 cents, and 89 cents respectively to every dollar of wealth held by white Americans.[6]

By providing all Americans with the tools and policies needed to reach financial stability, we contend that you not only save these households billions of dollars annually,[7] but also protect those most vulnerable to discrimination and wealth-based abuse. Requiring lenders to base loans on ability-to-repay requirements and limiting their ability to garnish wages through account access provides consumers with the ability minimize debt and maintain the liquid assets needed for basic financial obligations.

For this reason, the Experts of Color Network supports efforts made by the Consumer Finance Protection Bureau, and urges you to adopt a final rule to remove any additional exemptions from the ability-to-repay requirement and to limit the account access of lenders that impact the lives of so many families of color.

The Experts of Color Network, which is a group of over 200 of the nation’s leading Native American, Asian-American, African American, Latino, and Native Hawaiian experts on housing, jobs, savings and investment to debt, credit, social insurance, and business development. They are scholars, advocates, community practitioners, policy analysts, researchers, private sector leaders, philanthropists, and government officials in the asset-building field. The Center for Global Policy Solutions and the Insight Center for Community and Economic Development co-manage the Experts of Color Network.

Should you have any questions about our comments, please contact Sarah Murphy Gray at (202) 735-0505.

Thank you for your time and careful consideration.

Sincerely,

Maya Rockeymoore, Ph.D.
President
Center for Global Policy Solutions

Meizhu Lui
Board Member
Highlander Research and Education Center

Yunju Nam
Associate Professor
The State University of New York at Buffalo

Gabriela Sandoval
Director of Research
The Utility Reform Network (TURN)

Makani Themba
Chief Strategist
Higher Ground Change Strategies

Chris Rabb
Democratic Nominee for State Representative (PA-200)

Rudy Arredondo
President, CEO, and Founder
National Latino Farmers and Ranchers Trade Association

Jeremie Greer
Vice President, Policy and Research
CFED

Trina Shanks
Associate Professor
University of Michigan

Algernon Austin
Senior Research Fellow
Center for Global Policy Solutions

Aracely Panameno
Director, Latino Affairs
Center for Responsible Lending

William Darity Jr.
Samuel DuBois Cook Professor of Public Policy
Duke University

James Fenelon
Professor and Director
California State University, San Bernardino

Sheryl Lane
Director of Policy and Partnerships
EARN

Rebecca Dixon
Deputy Program Director
National Employment Law Project

James Carr
Coleman A. Young Endowed Chair and Professor in Urban Affairs
Wayne State University

Seema Agnani
Director of Policy and Civic Engagement
National CAPACD

Sasha Werblin
Economic Equity Director
The Greenlining Institute

Keith Corbett
Executive Vice-President
Center for Responsible Lending

Melany De La Cruz-Viesca
Assistant Director
UCLA Asian American Studies Center

Joe Brooks
Senior Fellow
PolicyLink

Avis Jones-DeWeever
Founder, CEO
Exceptional Leadership Institute for Women

Charles Betsey
Professor Emeritus
Howard University

Connie Evans
President and CEO
Association for Enterprise Opportunity

[1] Bourke, N., Horowitz, A., & Roche, T. (2012, July). Payday Lending in America: Who Borrows, Where They Borrow, and Why (Rep.). Retrieved September 27, 2016, from http://www.pewtrusts.org/~/media/legacy/uploadedfiles/pcs_assets/2012/pewpaydaylendingreportpdf.pdf

[2] Jorgensen, M., Dewees, S., & Edwards, K. (2008). Borrowing Trouble: Predatory Lending in Native American Communities (Rep.). Retrieved September 27, 2016, from http://www.aecf.org/m/resourcedoc/ACEF-Borrowing_Trouble-2007.pdf

[3] Kiel, P., & Waldman, A. (2015, October 9). The Burden of Debt on Black America. The Atlantic. Retrieved September 26, 2016, from http://www.theatlantic.com/business/archive/2015/10/debt-black-families/409756/

[4] DeNavas-Walt, C., & Proctor, B. D. (2015). Income and Poverty in the United States: 2014 (Rep.). Retrieved September 26, 2016, from https://www.census.gov/content/dam/Census/library/publications/2015/demo/p60-252.pdf

[5] United States Census Bureau. (2015, November 2). FFF: American Indian and Alaska Native Heritage Month: November 2015. Retrieved September 27, 2016, from http://www.census.gov/newsroom/facts-for-features/2015/cb15-ff22.html

[6] Tippett, R., Jones-DeWeever, A., Rockeymoore, M., Hamilton, D., & Darity, W. (2014, May 19). Beyond Broke: Why Closing the Racial Wealth Gap Is a Priority for National Economic Security (Rep.). Retrieved September 26, 2016, from http://cgps.benfredaconsulting.com/report/beyond-broke/

[7] Howarth, R., Davis, D., & Wolff, S. (2016, August). Shark?Free Waters: States are Better Off without Payday Lending (Rep.). Retrieved September 26, 2016, from http://www.responsiblelending.org/sites/default/files/nodes/files/research-publication/crl_shark_free_waters_aug2016.pdf